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No deal reached between EDC and 38 Studios

CURT SCHILLING, founder of 38 Studios LLC and a former Boston Red Sox pitcher, speaks during an interview in New York, U.S., on Monday, Feb. 13, 2012. 38 Studios, formerly Green Monster Games LLC, is an entertainment and intellectual property development company founded by Schilling and named for his jersey number.

PROVIDENCE - 38 Studios LLC asked the R.I. Economic Development Corporation for state assistance but no deal was reached during talks in today’s meeting.

Gov. Lincoln D. Chafee could not guarantee that 38 Studios would stay solvent without state assistance but described negotiations as “complex” and said the state did not want to throw good money after bad.

Chafee confirmed that 38 Studios missed $1.125 million loan guarantee fee payment May 1, but said that the company was current on its loan repayment.

38 Studios founder and former Red Sox pitcher Curt Schilling refused to answer questions, saying only, “My priority right now is to get back to my [company].”

According to a statement from the EDC, the board of directors did not take a vote regarding the future of the 38 Studios.

The company still has the option to cure the existing default by paying the past-due $1.125 million loan guarantee fee payment.

The EDC board of directors said it will continue to talk with representatives from 38 Studios and will resume today’s emergency meeting at its regularly scheduled board meeting on May 21.

Comments

Almost everyone in the business community predicted the demise of this deal.Everyone except the Director and Board (other than Karl) of RIEDC. It remains politicized and even restructuring has not resulted in any improvements. All of that money would have been better spent funding legitimate small businesees or business incubators. Why the state is willing to invest in a company run by an athlete with no experience in the high tech gaming software business is beyond my comprehension. Perhaps they were enamored of the glamour of sport. the Ex-Governor, the Director of EDC and its Board are culpable on this one.

As a closing thought maybe Curt is willing to put his mansion up as collateral to save his company. any further deals with RI should be contingent on that. Let him take the same risks other small businessowners take when they apply to a loan from their bank.

RIEDC provided a $75,000,000.00 loan to Studio 38. With a promise that Studio 38 would create 450 Rhode Island jobs. That amounts to $166,666.67 per job. EDC could have offered 450 small RI businesses a $166,666.00 working capitol loan based on expansion and adding employees. Probably to simple of an idea that could have added three times as many jobs and up started RI failing economy. Unfortunitly EDC and many RI politians don't think that way. Always looking for the big tuna forget the minoes. ADP

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